Bitcoin (BTC) price analysis 28 Dec: will $50,000 hold?
Bitcoin (BTC) may extend its recovery above $52,000
Bitcoin rose above the psychological mark of $50,000 on 23 December, boosting sentiment. As 2021 comes to an end, investors’ focus has shifted to next year.
Marcus Sotiriou, analyst at UK-based digital asset broker GlobalBlock, said: “Rather than focusing on bitcoin’s price one year out, I am more interested in the price of bitcoin five to ten years out where I can see bitcoin hitting $500,000 within that timeframe, however, it would not surprise me to see bitcoin above $100,000 at the end of 2022,” the Independent reported.
Bitcoin’s illiquid supply has continued to rise in the past few months, indicating that investors are stashing their purchases. The illiquid supply has risen to 76.13%, just short of the all-time high of 76.26%, according to data from Glassnode.
While several analysts are uber bullish for the long-term, Ray Dalio, founder of the world's largest hedge fund, Bridgewater Associates, while speaking on Lex Fridman’s podcast said that bitcoin was unlikely to surpass gold and hit the $1m mark because gold has been recognised as money for many thousands of years and is the preferred store of wealth.
Will bitcoin go up and end the year on a strong note? Let’s see what the charts project. Read our BTC price analysis to find out.
Bitcoin price technical analysis: weekly chart
However, the buyers are struggling to push the price above the 20-week exponential moving average (EMA). This suggests that the bears have not yet given up and they continue to sell on rallies.
The bears are currently attempting to pull the price below the 50-week SMA. If they succeed, the pair could drop to the strong support zone of $45,462.90 to $42,827.90.
A break and close below this zone could sink the pair to $39,565.25. This is an important level for the bulls to defend because if it cracks, the decline could extend to $30,000.
Contrary to this assumption, if the price turns up from the current level and the bulls drive and sustain the price above the 20-week EMA, it will suggest that the short-term corrective phase may be over. That could open the doors for a possible rally to $60,000.
The bitcoin price analysis shows that bulls are attempting a comeback but the bears are not willing to relent.
Bitcoin price technical analysis: daily chart
BTC’s price broke above the downtrend line and the 20-day EMA on 23 December, indicating that the corrective phase may be over. However, the bulls could not build up on this advantage and drive the price above the 50-day SMA.
This suggests that bears are unwilling to give up and they continue to pose a challenge at higher levels. The bears have pulled the price back below the 20-day EMA today. The pair could now drop to $45,462.90 and then to $42,827.90.
If the price rebounds off this zone, the pair could remain range-bound between $42,827.90 and $52,122.15 for a few more days. The flattish 20-day EMA and the relative strength index (RSI) just below the midpoint, suggests a balance between supply and demand.
The bulls will have to push and sustain the price above the 50-day SMA to signal a possible change in trend. Conversely, a break below $42,827.90 could indicate the possible resumption of the downtrend.
Bitcoin: Buy or sell at current levels?
The bitcoin price analysis suggests that the bulls and bears are battling it out near the 20-day EMA. If the price breaks and sustains below this support, the bears will fancy their chances and attempt to sink the pair to $45,462.90. Alternatively, the short-term trend could turn positive above $51,968.80.
The views and opinions expressed in the article are those of the author and do not constitute trading advice. Trading and investing involve substantial risks and you should do your own research or contact your financial adviser before arriving at a decision.